Focus Goes Back to the Macro Problems
Nov 10, 2011
Good Morning,
I'd like to take a moment to personally invite you to our 24th annual conference in Crystal Lake, IL on January 20th and 21st. We will feature in depth analysis about many of the topics you read about in the Wake-Up Call every day. We'd like to offer our Wake-Up Call readers an extension of the sale we ran on the ticket price last week which will save you $40.00 off the advertised price. This special will expire on Monday, Nov. 14 at 3PM. Please call Greg or Jeremy at 800-262-7538 register.
Paul Georgy
Allendale President and CEO
Good Morning! Paul Georgy with early morning comments for November 10, 2011 at 5:20 am. Overnight commodity markets bounce after Wednesday’s sharp selloff. The USDA report provides support to corn market with the lowering of yield and total production, however now the focus will shift to the demand side of the balance sheet. The USDA raised China’s imports of corn to 3 mmt and raised their production by 2.5 mmt. Price will be an important factor to entice demand as Argentina will likely be a competitor after the first of year. The macro markets are influencing traders’ willingness to accept risk. Greece problems were expected to be solved for a while but the coalition government is not in agreement on accepting EU funding requirements. Italy, the 3
rd largest economy of the EU, is in debt trouble and EU leaders say there will be no bailout. The bottom line is the Eurozone problems are not going away soon and will be affecting commodity prices with sharp moves and mostly likely lighter volume. What this means to us is producers have to be prepared to make marketing plans and have orders in place. We expect choppy markets ahead especially with holiday markets and year end not far away. Stay in touch with Allendale Research Center at
www.allendale-inc.com. The spread between choice and select beef has narrowed with choice down .43 and select up 1.27. Cash cattle trade is still at a standstill this week. Packer margins remain deep in the red. Pork cutout values continue to slide.
Markets as of 5:20AM
Corn—3 to 5 higher Beans—1 to 4 higher
Wheat— 2 to 4 higher
Live Cattle—30 to 50 higher Lean Hogs—50 to 1.00 higher
Dollar— .20 lower Crude— 1.14 higher
Gold— 25.50 lower
Allendale Advanced Charts
Corn futures exhibited an outside day on the charts. Opening higher and closing lower in the middle of the range gives no clear signal. Trading within key moving averages and holding uptrend gives the bulls hope. A close below Wednesday’s low could activate considerable sell stops and a close above Wednesday’s highs could send us to at least 6.75.
Nelson Notes from desk of Rich Nelson
If it were not for the sharp pressure from outside markets, traders could hold onto this new corn yield number as a bullish point to resonate. This is the lowest since 2003!
There is a significant risk of loss when trading futures and options contracts. This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named, and each investor should consider the appropriateness of trading on this information, based on their objectives. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. Past performance is not indicative of future results.
